Robinhood Markets (NASDAQ: HOOD) is the latest tech firm to undergo a workforce reduction and restructuring. The reductions were announced this evening as a part of the firms second quarter financial results.
The workforce reductions are expected to impact a total of 780 employees, with the restructuring to result in the closure of two separate offices. Charges as a result of both the office closures and workforce reductions are expected to amount to between $45 million and $60 million, which will hit the firms third quarter financial results.
Share based compensation however is expected to be reduced by between $40 million and $50 million during the same period however, although impacted employees awards are expected to continue to vest over a two month period.
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The headcount reduction is expected to impact 23% of the firms full-time workforce.
The reorganization will see Robinhood transition into what it refers to as a general manager structure, which will see managers take on responsibilities for individual businesses. The result of this, is that the firms Chief Product Officer, Aparna Chennapragada, will step down from her role. She’s expected to remain in an advisory role with the company through to January 2, 2023. As part of her departure, she will receive $550,000, which is equivalent to her base salary, as ell as $20,000 to cover legal fees, and a sum equal to twelve months worth of health benefits. She’ll also remain eligible to receive the FY2022 senior leadership team bonus issued by the company in the spring of 2023.
The major layoffs at Robinhood follow a trend in the tech space. Last week, Shopify (TSX: SHOP) announced it would be reducing its workforce by 10%, while GameStop (NYSE: GME) earlier in July also initiated layoffs.
Robinhood Markets last traded at $9.23 on the Nasdaq.
Information for this briefing was found via Edgar and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
